customers first - another look at value innovation
TRANSCRIPT
CUSTOMERS FIRSTanother look at value innovation
Andries ReymerBusiness innovation coach
kmo-connect beurs, Lotto Arena
Master in Product DevelopmentUniversity of Antwerp 2006
Since 2016 at AMS as Business Innovation Coach. I assist companies in broad innovation trajectories. Currently working on a ’Value Based’ project.
Previously worked for KOMONO, PHILIPS, SIRRIS.
Expertise CenterBusiness Design and Innovation
Answer some of the most difficult questions facing managers:•How does one design global operations so they are at once effective and equitable? •How does one can stay focused on the customer and navigate through a myriad of ways to connect, engage and communicate with customers.•What is the purpose of a corporation beyond the creation of shareholder value? •….
What we do: applied research
In this deck
• WHAT • WHY • HOW
What?
costs
price
value
customer
surplus value
profit
COMPANIES WHO STRIVE FOR SUCCES COMPETE BY SHIFTING MEANING
Barco
Compentence blindness
Company experts tend to focus on features of products that are interesting for them, but not always for customers. By doing so, they can miss the next big thing that will disrupt their business.
Commoditized customers
Going from commoditized customers, only focussed on price towards engaged customers chosing a product or service based on the value it brings for them.
Qualitative user researchQualitative user research
Methods Brief Explanation
ObservationThe researcher gets close enough to study objects to observe (with/without participation) usually to understand whether people do what they say they do, and to access tacit knowledge of subjects
InterviewThis involves asking questions, listening to and recording answers from an individual or group on a structured, semi-structured or unstructured format in an in-depth manner
Focus Group Discussion
Focused (guided by a set of questions) and interactive session with a group small enough for everyone to have chance to talk and large enough to provide diversity of opinions
Other Methods Rapid assessment procedure (RAP), free listing, photo ethnography, diary, visual anthropology, pile sort, ranking, life history (biography)…
can give you insight in what people do or think but won’t tell you about.
Because, qualitative user research
Going from assumptions to validated facts
ContextWater is worth a lot if you’re stuck in the desert for some days.
When your basement When your basement is flooded you want is flooded you want to pay to get rid of to pay to get rid of the water.the water.
In the supermarket In the supermarket where water is where water is abundant, you’re abundant, you’re choice is deliberate.choice is deliberate.
Qualitative research
“Beauty is in the eye of the beholder”Shakespeare
“Beauty is in the eye of the beholder”Andries Reymer Value
Why?
80% of innovations fail
Most innovations fail because their creators are “Putting the ‘wow’ before the ‘why'”
Mark Payne. Cofounder, Fahrenheit 212
Source: IDEO
Meaningfull innovation considers not only the technical feasibility, but values the desirability and viability aswell.
Sour
ce: D
oblin
, Del
oitte
Dev
elop
men
tThere is more than one way to innovate.
revenue from innovation
With the aim of
RAISE
and
development time
REDUCED
How?
Customer value
The only base to formulate your price in this flow is your product and the cost it represents.The value and the reaction of the customer is only a consequense of this price.
Cost plus
COSTS+
Margin=
PRICE
Cost plusChanging costsChanging forecast? 100k -> 50kObsolete stock? Bad engineering?Changing exchange rates?
Declining valueDiscounts for over stock?No innovation -> commodity?
Competition basedPredictability competitionWhat do you know from competitors?Do you know their roadmap?Is their direction the right one?Action -> reaction!
Price warNo differentiation -> commodity?Race to the bottom -> price pressure!
Customer value
In a reversed flow you have insights from your customers needs and the elements your customer values. This gives you insight in their willingness to pay what gives you a good angle towards your pricing.
Research is ongoing,want to get involved?
More information here: PROJECT VALERIE
Business value
Price realization
The research focusses on 2 major topics: price orientation and price realization.
Price orientation
Customer insightPerceived value
Next best alternative
Willingness to payValue for money
Next best alternative
Price realization
SalesPricing teamSelling value
EngineeringCreating true value
Cost to serve
We developed a scan to position yourself in this grid as an indication on your price setting and price getting capabilities.
Price realization
Business value
Project Valerie
The project starts by building buying personas, mapping the stakeholders, discovering insights with your customers up to price and sales learnings.A new methodology is developed to create value step by step.
VALUE BASED INNOVATION
1. VALUE DETECTION
2. VALUE CREATION
3. VALUE CAPTUREProject Valerie
The methodology is based on 3 phases: value detection, creation and capture.And on 3 business elements: product, service and brand.
1,99€
Launch of new private label yoghurt with initial price setting of:
Case
Research by MIT-Sloan mgmt review
Case Considered to be a commodity in between competitors: all having the same characteristics. They found one unique feature that their target audience, mothers buying yoghurt for their little children, could relate to: the yoghurt was perceived as healthier due to the low sugar content. This gave them the opportunity to position and price the product completely different. Just below the A-brand but well above their competitors.
LOW IN SUGAR
CaseThe health benefit was highlighted and the price was set 40% higher:
2,49€Sales numbers were higher than expected and revenu was 600% more than anticipated.
So if you recognize this,know that we can help you!
www.antwerpmanagementschool.be
Andries ReymerMobile +32 472 175 [email protected] Andries Reymer
@AndriesReymerGet in touch!
Opening minds. Touching Souls.Energizing Business.